Betting odds are something that can be found in every kind of sports bet, from horse racing to NFL to boxing. Basically, they are a representation of the probability of the outcome of the game, or what may happen. Betting odds are decided not only by the bookies or online betting sites, which set them, but also by public opinion. Understanding how they work is very important to becoming a successful and long-term profitable punter.
How Betting Odds Affect You
One may think that betting odds are something for only serious punters to take into consideration. For example, when placing a bet on the Melbourne Cup, if you bet on the winner, you win, right? Not necessarily, which is why being able to work out betting odds is so important.
The odds directly affect how much you take home from a wager. For example, should you bet on a winning horse, with odds of 1 / 4, you will only receive one unit for every four that you stake. So if you stake 4 dollars, you will only get one dollar back for a total of five dollars. In the long run, this isn’t going to be wildly profitable.
If you back an underdog, however, say a young horse running at odds of 7 / 2, you will get back seven units for every two that you stake. This makes much more financial sense. Professional punters know that one has to not only back the underdogs, but also take some losses in order to be profitable in the long run.
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Probability – The Basics
All betting odds are based on probability. Working out betting odds can be done if you have a basic grasp of maths and know some simple equations.
The probability of an outcome can be worked out by the equation: favourable outcomes / all possible outcomes. In a coin toss for example, this would look like: 1 / 2, as there are two possible outcomes, one of which is favourable to you. The answer to this would be 0.5, so the probability of your outcome happening is 0.5 out of one, or 1 / 2.
Working This Into Betting Odds
To calculate your betting odds from here, you can use the equation 1 / probability of your outcome. So in our coin toss example the equation would look like: 1 / 0.5, which would give us 2.0. In a horse race with four runners, it would look slightly different, as not all horses have the same chance, or odds, of winning.
This is where bookies begin to play a part in how you work out your betting odds. Let’s use our four horse race. If every horse were absolutely equal in every way, each one would have a 0.25 chance of winning, or odds of 1 / 4. This isn’t possible of course, so bookies will allocate horse 1 a 0.5 chance, horse 2 a 0.25 chance, and horse three and four a 0.125 chance. Betting on the favourite may mean that you win, but you won’t win much. Betting on the underdog will net you 1 / 0.25 which will give you 4 / 1, meaning that for each unit you stake, you get four back, much more profitable.
Being able to calculate betting odds in any sport is imperative as a punter. Take the time to read through the different odds offered by bookies, and practice working them out and how much you would hypothetically win. This will make you a more profitable punter in the long run.